Former Invis exec weighs in on PMG takeover bid

by Vernon Clement Jones13 Apr 2011

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Former Invis exec weighs in on PMG takeover bid

A former executive vice president for Invis Inc. is throwing cautious support behind the Pacific Mortgage Group takeover bid, suggesting it could strengthen the hand of member brokers in an increasingly competitive field.

“On the surface, it would appear that the deal is a good offer for shareholders and would accrue to the benefit of Invis brokers as they look to differentiate themselves from the competition,” Fiona Campbell, the superbroker’s former executive VP, told MortgageBrokerNews.ca. “It is a potentially empowering thing for brokers to have an in-house lender, and not just a white label product behind them.”

The tentative endorsement comes on the heels of Monday’s announcement from Pacific Mortgage indicating it has now taken its $9-million equity bid for Invis directly to shareholders. The move is meant to circumvent board opposition, and was formalized in a binding letter of intent to Invis’s board on March 11. The deal includes an equity incentive package for all Invis and Mortgage Intelligence mortgage brokers and agents. The offer would give those industry professionals a stake in the combined organization.

“We felt that there were some misunderstandings about our offer, and we wanted to set the record straight,” Alex Haditaghi, CEO of Pacific Mortgage Group Inc., told MortgageBrokerNews.ca, just after the announcement. “We believe that it is an amazing offer for shareholders of both companies and brokers and agents of both companies. I think it will create a more financially profitable company, better able to compete with the big banks and drive business to the broker channel.”

Invis’s new executive vice-president and CFO, Cameron Strong, shot back Monday, describing the offer as “unacceptable” at the same time denying rumours of ongoing negotiations.

Campbell – with Invis from its inception in 2000, before leaving the company in late 2009 – suggests that the deal could ultimately protect the long-term interests of both shareholders and brokers within the Invis network.

“I know that competition for brokers is exceptionally fierce among superbrokers,” she said Wednesday, pointing to the increasing number of migrations from one broker network to another. “I would love to see Invis flourish, and I think this deal would give Pacific and Invis the combined power that comes through economies of scale. For brokers, there’s the opportunity to access new products thorough Pacific’s lending arm and that should help them compete.”

The overriding result of the deal could be to create the industry’s biggest triple threat -- Canada's leading independent residential mortgage origination, funding and servicing business. Pacific’s lender, myNext Mortgage, would figure prominently in the new company as well as a new mortgage-servicing business. Other opportunities are expected to arise from the sheer heft of the new company, with Campbell indentifying insurance as one key area for growth.

The mortgage agent was a key player in helping grow Invis through two takeovers, its self-acquisition and, later, its merger with Mortgage Intelligence in 2009.

“As a broker, you’re always looking for the best deal for your clients,” Campbell told MortgageBrokerNews.ca, “and having access to another lender would only enhance that. Ultimately, it’s up to the elected board and shareholders to decide what they feel is strategically best for the organization.”